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By John Stevenson, EMC Management Consultants

In this extraordinary year how has the pandemic affected South East manufacturers? In conjunction with Insider Media we asked a cross section of leading manufacturers what impact this crisis was having on their business and what actions they were taking.

The majority of those in the survey had seen their sales decrease versus the previous year with the consequential furlough and redundancy impact on their employees. Whilst 66% of respondents felt their business was in a good place to recover post Covid-19 40% had no plans in place as to how this would occur. This is a weakness we see daily with SME’s and where we find we can make a real difference to the chances of a company’s positive recovery.

The primary impact on businesses has been reduced demand for their products and services with 71% of respondents seeing an adverse impact. Somewhat surprisingly only 21% reported cash flow issues which possibly reflects the benefits of the governments furlough support and the variety of loan and grant schemes available to business.

The impact on sales revenue was significant with over 70% seeing demand reduce by over 10% but of more concern was the one third of those surveyed seeing a sales reduction of over 50% from the same period in 2019. At EMC we have also seen varying levels of revenue impacts with our clients. There has however been a significant difference for companies who have undertaken a strategic review of their commercial position and have crafted new sales and marketing plans. These plans which have considered the market opportunities in the new trading environment have invariably, when implemented, seen results significantly better than the survey average. This sales and marketing review project is regularly adopted by EMC’s clients.

The ability to be agile and adapt rapidly to the impacts of an event like the pandemic is not something that many companies can readily do with their entrenched systems of annual reviews and plans. It was highly encouraging to see over two thirds of companies had adopted new flexible working methods and patterns with 43% diversifying and launching new products. Almost 40% of respondents had deployed their sales and marketing teams and this review and reallocation of costly commercial resource can have a dramatic impact on lead generation, conversion, and revenue generation. This is an opportunity to challenge sales and marketing structures that may have been in place for many years. Face-to- face selling will not be feasible for some time and may never culturally return in some industries. We have seen opportunities to redirect resources with more focus on digital and social media marketing and to redeploy external sales teams. In most cases this will lead to a more effective sales team and a reduction in overall sales overheads. Whilst the Covid-19 crisis has driven change it has also allowed companies to take a comprehensive audit of their sales needs, an invaluable process which without a crisis would rarely be undertaken by organisations.

Over 60% of companies involved in the survey felt they were well placed to emerge stronger when the economy returns. This is welcome optimism amidst much of the economic doom and with 60% having new business plans in place for the second six months of trading there seems to be a strong foundation to face the uncertain economic environment. This is supported by the planned investment in new products and services – 56% and the desire to enter new geographic environments by almost a quarter of respondents.

Over the next 12 months there was still a good level of investment planned with half of those surveyed looking to new sales initiatives and 40% hoping to invest in IT & digital systems. This latter IT investment is encouraging as it is 1 of the primary drivers when maintaining a competitive market position.

In summary the results from this 2020 South East manufacturing survey reflect the difficult environment companies have operated in over the last 6 months and the uncertain times ahead. It is encouraging to see most companies continuing to selectively invest in the future with IT and sales initiatives. More than 50% of companies have plans in place for the months ahead although many of these are not yet formalised.

EMC have successfully worked with SME’s in the South East through several economic challenges. Those companies who critically review their competitive position within the current economic environment will create more relevant and financially advantageous plans than those who simply dust of their annual plan and amend slightly. The implementation of these plans is often a greater challenge than their creation and some external help to relentlessly manage the adoption and execution will significantly improve the return on investment.

Manufacturing in the South East entered this 2020 pandemic crisis in good health and the successful companies will be those who can act in an agile manner, adjusting their operational costs and competitive position as the environment changes. This is an unprecedented crisis, but companies will still emerge stronger and more profitable if they can channel their creativity and adapt and manage their organisation in a manner that matches the economic market demands.

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